Although the real estate sector has not been the most technology-focused business, that is changing and proptech has become an essential in order for companies to maintain a competitive market position, according to findings from the Urban Land Institute and law firm Goodwin.
The report, Proptech: Changing the Way Real Estate is Done, is based on a survey of 200 ULI members from around the world who have had direct involvement with their companies’ adoption of proptech.
The survey identifies which technologies’ adoption rates are increasing across different business areas. “The cloud, IoT, mobile devices and 5G have all opened the doors on the potential for innovation, but it is the application of this technology from the end users of proptech – real estate companies – which will shape the transformation of the industry over the next three years and beyond,” said ULI Global CEO Ed Walter.
Property and portfolio management are key proptech targets
The report indicates that data analytics, property management and portfolio management are sectors that benefit most from adoption of new technology, with capital raising so far lagging behind. Interest is shifting dramatically to data analytics, project management and climate change, with companies indicating these will be key growth areas for their proptech adoption over the next three years.
About 40% of companies are developing proprietary technology tools. When partnering with and/or investing in technology companies 31% said they are helping screen for high-impact new technologies, and 16% were diversifying their overall investment strategy.
The survey found that only 15% of companies do not have plans for future investment and increased adoption of technology.
“Proptech is not only shaping the industry but has become a critical driver of competitive advantage in a competitive marketplace globally,” said Minta Kay, chair of Goodwin’s real estate industry group and co-head of its proptech group.